NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5435
SPONSOR: Solages TITLE OF BILL:
An act to amend the tax law, in relation to top personal income tax
rates
TITLE OF BILL:
An act to amend the tax law, in relation to top personal income tax
rates
PURPOSE OR GENERAL IDEA OF BILL:
To create a new permanent higher personal income tax rate for the high-
est personal income tax brackets in the state
SUMMARY OF PROVISIONS:
Section one of this bill amends subparagraph (B) of paragraph 1 of
subsection (a) of Section 601 of Tax Law to create a new, higher
personal income tax (PIT) rate of 10.8% for incomes of $5 million and
above and 11.4% for incomes of $25 million and above. This is the
subsection of Section 601 that contains the tax table for the married
filing jointly and surviving spouse tax statuses.
Section two of this bill amends subparagraph (B) of paragraph 1 of
subsection (b) of Section 601 of Tax Law to create a new, higher
personal income tax (PIT) rate of 10.8% for incomes of $5 million and
above and 11.4% for incomes of $25 million and above. This is the
subsection of Section 601 that contains the tax table for the head of
household tax status.
Section three of this bill amends subparagraph (B) of paragraph 1 of
subsection (c) of Section 601 of Tax Law to create a new, higher
personal income tax (PIT) rate of 10.8% for incomes of $5 million and
above and 11.4% for incomes of $25 million and above. This is the
subsection of Section 601 that contains the tax table for the single and
married filing separately tax statuses.
Section four of this bill makes a conforming change to subparagraph (B)
of paragraph (1) of subsection (d-4) of Section 601 of Tax Law to
include the higher 11.4% PIT rate in the existing benefit recapture
provisions of law for married filing jointly and surviving spouse tax
filers that have more than $25 million of income. "Benefit recapture"
means that the maximum tax rate is applied to all of a filer's income if
the income exceeds the top tax bracket of $25 million rather than only
to the portion of the income that exceeds $25 million.
Section five of this bill makes a conforming change to subparagraph (B)
of paragraph (2) of subsection (d-4) of Section 601 of Tax Law to
include the higher 11.4% PIT rate in the existing benefit recapture
provisions of law for head of household tax filers that have more than
$25 million of income.
Section six of this bill makes a conforming change to subparagraph (B)
of paragraph (3) of subsection (d-4) of Section 601 of Tax Law to
include the higher 11.4% PIT rate in the existing benefit recapture
provisions of law for single and married filing separately tax filers
that have more than $25 million of income.
Section seven sets the effective date.
JUSTIFICATION:
Increasing New York's top tax rates for those earning over $5 million
and over $25 million by 0.5% would generate up to $3 billion for the
state to invest in working-class New Yorkers' basic needs like child
care, education, healthcare, transportation and housing.
This bill, which is drawn directly from proposals in the FY25 Senate and
Assembly one-house budgets, would raise personal income tax rates on
those who can most afford it in order to ensure that New York is able to
fully fund critical public services. Our tax system has evolved to bene-
fit the very wealthy. America's billionaires - about 800 people -
control 57% more wealth ($5.8 trillion) than the entire poorer half of
U.S. society, roughly 65 million households ($3.7 trillion).
Majorities of all Americans support higher taxes on the very rich. In
New York, more than two-thirds of voters say the government should raise
taxes on corporations and the wealthiest people to improve services for
New Yorkers. After decades of being sold trickle-down economics, we now
see it is empty rhetoric, The very rich are getting richer at the
expense of working Americans, who feel like they are working harder than
ever. These changes to New York's tax laws would provide the resources
and programs to keep families and college graduates in the Empire State.
PRIOR LEGISLATIVE HISTORY:
None
FISCAL IMPLICATIONS:
TBD
LEGISLATIVE HISTORY:
New bill.
EFFECTIVE DATE:
Immediate
